With all the recessionary woes going on, it’s shaping up as a tough year to spend public money. On that score, budget leaders in Dutchess and Ulster counties agree. But as to the specifics, and especially as to whether the state budget proposed by Gov. Eliot Spitzer will harm county finances, it seems to depend on whom you ask.
Dutchess County Budget Director Valerie Sommerville says her county may lose nearly $5.5 million in state funding this year and next, and has issued an angry memo drubbing the Spitzer budget’s potential impact. Ulster County Administrator Michael Hein is more circumspect, but not exactly encouraging either.
Sommerville estimates that the county budget may lose nearly $5.5 million in state funding this year and next. Dutchess’s total budget is about $400 million in 2008, meaning an extra 3 percent of either belt-tightening on top of an already lean budget will have to be done, or taxes will have to be raised.
Hein, an early Democratic candidate in the upcoming race to become the first Ulster County executive, declined to offer any specifics as to how the state budget would impact his county, which has a total budget of about $325 million in 2008. “We are budgeting in extremely challenging times,” he said, adding: “We have concerns.”
Sommerville, working in an office overseen by Republican County Executive Bill Steinhaus, was more direct. “If there is state legislative approval of Governor Spitzer’s proposed budget, it could result in a negative impact to Dutchess County’s 2008 budget of $2.6 million and could add an additional $2.9 million impact to the 2009 budget. This would mean more than a $5.5 million increase forced on local property taxpayers,” she wrote in a Jan. 31 memo to Steinhaus.
Politics may be influencing the respective responses. Steinhaus is Sommerville’s boss and is engaged in a budget battle with Democrats in the county legislature, particularly with regard to a controversial hiring freeze the executive imposed after Democrats took control of the legislative majority this year for the first time in decades. Hein, a former Republican who is wooing Democrats in what may be a bitter nomination battle, can ill-afford to anger the notoriously temperamental Gov. Spitzer with critical comments about a budget proposal.
Sommerville and Hein both noted hopefully that the governor’s budget is subject to revision by the state legislature, and both budget officials mentioned that the governor’s press packet claims the proposed budget would actually help counties. Neither of them were inclined to endorse that claim.
Gov. Spitzer proposes $124 billion in spending for the 2008-2009 fiscal year, which begins April 1. That would be a roughly 5 percent increase in state spending over last year, in the face of a budget deficit projected as roughly $4 billion.
Hein was obliquely critical of the governor’s budget proposals, and conceded there is a “cost-shifting” of functions that were once paid for by the state onto the backs of local, county and school taxpayers. And he acknowledged that an analysis of Spitzer’s budget by the New York State Association of Counties (NYSAC), of which he is a board member, has estimated that on balance, the proposal “will have an overall negative impact on counties.”
But weeks and maybe months of negotiation lie ahead, and NYSAC also praises some of what is being proposed by Spitzer. “We (at NYSAC) also understand the governor has pushed forward a lot of positive initiative so in the end this is a dialogue and we hope our voices are heard,” said Hein.
Sommerville refused to comment for this article, referring a reporter to her Jan. 31 memo to Steinhaus. “Most of this impact (on county finances from Spitzer’s proposed budget) is the result of proposals which shift state costs to county governments – costs previously absorbed by the state, including more for social services public assistance, youth detention costs and funding for county highways and the community college,” wrote Sommerville in her memo.
In addition to state aid, counties receive revenue from the federal government, and from sales taxes and property taxes. In Dutchess County there is also a mortgage tax, which Ulster County’s legislature adopted but which was never approved by the state legislature. So while a state budget problem presents difficulties for counties, the general recessionary tenor of the local and national economy also bodes ill for county coffers.
“In addition to the uncertainties of the state budget, we know the current national economic climate paints an unsettling picture for the coming year,” wrote Sommerville.
Perhaps not surprisingly, her memo supports the policies of her boss in his battle with the Democratic-controlled legislature, saying a hiring freeze should be maintained and other cost-cutting measures taken on a case-by-case basis.
Hein agrees that times are tough and likely getting tougher. He cites the national economy, a volatile stock market that may be trending downward and dwindling county sales tax receipts that, he said, “are not booming. And the local economy in general is having serious issues. What we’re looking at is budgeting in extremely challenging time.”